OKX Head: Regulatory Pressure on Binance is a Benefit for the Entire Crypto Industry
OKX founder and CEO Star Xu made an unexpected but highly telling statement: the global regulatory pressure on Binance is one of the best things to happen to the crypto industry. In his view, the era of regulatory arbitrage, on which the largest exchange built its dominance for years, is coming to an end. And paradoxically, this benefits the entire market.
The discussion was sparked by reports that the Greek regulator HCMC may reject Binance's application for a MiCA license. Without it, the largest exchange risks losing the right to serve clients in the European Union from July 1, 2026. OKX itself has already obtained a MiCA license through Malta, so Xu speaks from the position of a direct competitor, but his argumentation extends far beyond competition.
The essence of the OKX head's position
Xu claims that many see increased regulation of Binance as a threat to competitors, but he holds the opposite view. For over a decade, competition in the crypto sector, he says, has largely been defined by regulatory arbitrage. Companies operating with fewer restrictions gained an advantage over those investing in licenses, compliance, and governance.
As regulators bring Binance up to uniform standards worldwide, this advantage is gradually disappearing. Competition, Xu believes, should not be based on who operates under the fewest rules. It should be about products, technology, execution, governance, and trust. Essentially, he states: the strongest competitors are not those who know how to bypass rules, but those who create better products and manage risks.
What Xu accuses Binance of
Binance's success, according to Xu, was built not only on technology and liquidity but also on the ability to create and promote narratives around crypto assets. The exchange, founded by Changpeng Zhao, built a vast ecosystem of founders, former employees, venture funds, and related projects that received listing rights and access to a retail audience. Meanwhile, many tokens lost over 95% of their value after launch.
Xu describes this as a "self-sustaining cycle": when one narrative fades, a new one immediately emerges, insiders and early participants reap disproportionate benefits, and the majority of losses fall on retail investors. Instead of losses in the previous cycle, users are encouraged to focus on potential profits in the next one.
Separately, the OKX head criticized Binance's compliance, calling it a shift "from refusing regulation to paper regulation." He recalled that after a series of enforcement actions and a four-month prison sentence for Binance founder Changpeng Zhao, the company changed its public stance and began presenting itself as "one of the most law-abiding in the industry." However, according to Xu, what matters is not the number of hired specialists, but whether the programs are aimed at managing real risks or merely creating the appearance of legal compliance.
Xu also raised the issue of shifting regulatory risks to separate structures. He pointed to Binance's exit from Russia through the sale of its business to CommEX and the exchange's connection to the Aster project, whose operating model is considered similar to Hyperliquid, previously criticized by Changpeng Zhao.
My opinion as an analyst: Star Xu's statement is not just criticism of a competitor, but a clear signal to the market. Regulatory arbitrage was indeed one of the main drivers of Binance's growth, and its disappearance levels the playing field. Now, those who build real value will win, not those who know how to manipulate narratives. For the industry, this is a path to maturity and the trust of institutional investors.